REG - Anglo American PLC - Anglo American Q3 2018 Production Report
Anglo American plc
Production Report for the third quarter ended 30 September 2018
Anglo American reports a 1% increase in total production on a copper equivalent basis in the third quarter of 2018, compared to the same period of 2017, excluding the Minas-Rio stoppage(1).
Mark Cutifani, Chief Executive of Anglo American, said: "Our focus on driving efficiency and productivity across the business resulted in another strong quarter, with volumes 1% higher than the solid operational performance seen in Q3 2017. Production per employee has increased by 5% in 2018, compared to 2017, as we maintain relentless discipline on controllable costs. Strong operational performance at our Copper assets delivered a 17% increase in production, more than offsetting planned lower volumes at De Beers and the impact of rail infrastructure constraints at Kumba in the first half of the year."
Highlights
· De Beers production decreased by 5% to 8.7 million carats due to expected lower grades at Jwaneng and lower volumes at Venetia, due to a shutdown to upgrade its processing plant ahead of its transition from open cut to underground operations.
· Copper production increased by 17% to 171,800 tonnes reflecting continued strong operational performance across all operations and planned higher grades.
· Platinum and palladium production increased by 4% to 649,000 ounces and 1% to 411,000 ounces respectively driven by an improved performance at Amandelbult and the joint venture operations.
· Kumba's iron ore production decreased by 9% to 10.5 million tonnes as planned, to offset elevated stock levels arising from Transnet rail constraints in H1 2018.
· Metallurgical coal production decreased by 3% to 5.4 million tonnes with the timing of longwall moves.
· Thermal coal export production increased by 13% to 7.7 million tonnes reflecting solid operational improvements at our coal assets.
Production Summary
Q3 2018
Q3 2017
% vs. Q3 2017
YTD 2018
YTD 2017
% vs. YTD 2017
Diamonds (Mct)(2)
8.7
9.2
(5)%
26.2
25.3
3%
Copper (kt)(3)
172
147
17%
485
431
13%
Platinum (koz)(4)
649
621
4%
1,882
1,810
4%
Palladium (koz)(4)
411
408
1%
1,224
1,183
4%
Iron ore - Kumba (Mt)
10.5
11.5
(9)%
32.9
33.3
(1)%
Iron ore - Minas-Rio (Mt)(5)
-
4.2
-
3.2
12.8
(75)%
Metallurgical coal (Mt)
5.4
5.5
(3)%
16.2
14.7
10%
Thermal coal (Mt)(6)
7.7
6.8
13%
21.7
21.7
-
Nickel (kt)(7)
11.5
11.2
3%
30.9
32.4
(5)%
Manganese ore (kt)
888
840
6%
2,635
2,506
5%
(1) Copper equivalent production is normalised for Bokoni being placed on care and maintenance in Q3 2017 and the Minas-Rio production stoppage in 2018. Including the Minas-Rio stoppage, production decreased by 3% compared to Q3 2017.
(2) De Beers production is on a 100% basis, except for the Gahcho Kué joint venture which is on an attributable 51% basis.
(3) Contained metal basis. Reflects copper production from the Copper business unit only (excludes copper production from the Platinum Group Metals business unit).
(4) Produced ounces. Reflects own mine production and purchases of metal in concentrate.
(5) Wet basis.
(6) Reflects export production from South Africa and Colombia.
(7) Reflects nickel production from the Nickel business unit only (i.e. excludes nickel production from the Platinum Group Metals business unit).
DE BEERS
De Beers(1)
Q3
2018
Q3
2017
Q3 2018
vs.
Q3 2017
Q2 2018
Q3 2018 vs.
Q2 2018
YTD 2018
YTD
2017
YTD 2018
vs.
YTD 2017
Botswana (Debswana)
000 carats
5,699
6,056
(6)%
6,279
(9)%
17,786
17,180
4%
Namibia
(Namdeb Holdings)
000 carats
460
454
1%
515
(11)%
1,503
1,317
14%
South Africa (DBCM)
000 carats
1,337
1,548
(14)%
1,018
31%
3,448
4,059
(15)%
Canada
000 carats
1,178
1,120
5%
1,185
(1)%
3,432
2,764
24%
Total carats recovered
000 carats
8,674
9,178
(5)%
8,997
(4)%
26,169
25,320
3%
Rough diamond production decreased by 5% to 8.7 million carats due to planned volume reductions in Botswana (Debswana) and South Africa (DBCM).
Botswana (Debswana) production decreased by 6% to 5.7 million carats due to the planned processing of lower grade material at Jwaneng. Production at Orapa(2) remained in line with Q3 2017 at 2.6 million carats.
Namibia (Namdeb Holdings) production was flat at 0.5 million carats.
South Africa (DBCM) production decreased by 14% to 1.3 million carats due to a planned shut down at Venetia to upgrade the processing plant ahead of the transition from open cut to underground operations.
Canada production increased by 5% to 1.2 million carats, driven by higher grades at Victor, which is approaching the end of its life. Gahcho Kué production was in line with Q3 2017.
Rough sales volumes amounted to 5.0 million carats (4.6 million carats on a consolidated basis(3)) from two sales cycles in Q3 2018, compared with 6.9 million carats (6.5 million carats on a consolidated basis(3)) from two sales cycles in Q3 2017. Rough sales volumes were down as a result of Sightholders being given the opportunity during the seventh Sight of 2018 to re-phase the allocation of some smaller, lower value rough diamonds. Rough sales revenues were broadly in line with Q3 2017.
Full Year Guidance
Full year production guidance(1) remains at 34-36 million carats but is expected to be at the higher end of the range.
(1) De Beers production is on a 100% basis, except for the Gahcho Kué joint venture which is on an attributable 51% basis.
(2) Orapa constitutes the Orapa Regime which includes Orapa, Letlhakane and Damtshaa.
(3) Consolidated sales volumes exclude De Beers' JV partners' 50% proportionate share of sales to entities outside De Beers from Diamond Trading Company Botswana and the Namibia Diamond Trading Company, which are included in total sales volume (100% basis). 2017 includes pre-commercial production sales volumes from Gahcho Kué.
De Beers(1)
Q3
2018
Q2
2018
Q1
2018
Q4
2017
Q3
2017
Q3 2018 vs.
Q2 2018
Q3 2018
vs.
Q3 2017
YTD
2018
YTD
2017
YTD 2018
vs.
YTD 2017
Carats recovered (000 carats)
100% basis (unless otherwise stated)
Jwaneng
3,143
3,025
2,984
2,512
3,477
4%
(10)%
9,152
9,345
(2)%
Orapa(2)
2,556
3,254
2,824
2,992
2,579
(21)%
(1)%
8,634
7,835
10%
Botswana (Debswana)
5,699
6,279
5,808
5,504
6,056
(9%)
(6%)
17,786
17,180
4%
Debmarine Namibia
322
349
365
328
353
(8)%
(9%)
1,036
1,050
(1%)
Namdeb (land operations)
138
166
163
160
101
(17%)
37%
467
267
75%
Namibia (Namdeb Holdings)
460
515
528
488
454
(11%)
1%
1,503
1,317
14%
Venetia
1,178
922
1,008
1,023
1,401
28%
(16%)
3,108
3,579
(13%)
Voorspoed
159
96
85
126
147
66%
8%
340
480
(29%)
South Africa (DBCM)
1,337
1,018
1,093
1,149
1,548
31%
(14%)
3,448
4,059
(15%)
Gahcho Kué (51% basis)
927
985
838
830
930
(6%)
(0%)
2,750
2,203
25%
Victor
251
200
231
163
190
26%
32%
682
561
22%
Canada
1,178
1,185
1,069
993
1,120
(1%)
5%
3,432
2,764
24%
Total carats recovered
8,674
8,997
8,498
8,134
9,178
(4%)
(5%)
26,169
25,320
3%
Sales volumes
Total sales volume (100%) (Mct)(3)
5.0
10.0
8.8
8.2
6.9
(50%)
(28%)
23.9
26.9
(11%)
Consolidated sales volume (Mct)(3)
4.6
9.4
8.4
7.5
6.5
(51%)
(29%)
22.4
25.6
(13%)
Number of Sights
(sales cycles)2
3
2
3
2
7
7
(1) De Beers production is on a 100% basis, except for the Gahcho Kué joint venture which is on an attributable 51% basis.
(2) Orapa constitutes the Orapa Regime which includes Orapa, Letlhakane and Damtshaa.
(3) Consolidated sales volumes exclude De Beers' JV partners' 50% proportionate share of sales to entities outside De Beers from Diamond Trading Company Botswana and the Namibia Diamond Trading Company, which are included in total sales volume (100% basis). 2017 includes pre-commercial production sales volumes from Gahcho Kué.
COPPER
Copper(1)
Q3
2018
Q3
2017
Q3 2018
vs.
Q3 2017
Q2
2018
Q3 2018 vs.
Q2 2018
YTD
2018
YTD
2017
YTD 2018
vs.
YTD 2017
Los Bronces
t
95,800
78,100
23%
89,700
7%
270,600
232,900
16%
Collahuasi
(44% share)
t
61,500
58,300
5%
54,700
12%
176,800
167,000
6%
El Soldado
t
14,500
10,900
33%
13,600
7%
37,400
30,800
21%
Total Copper
t
171,800
147,300
17%
158,000
9%
484,800
430,700
13%
(1) Copper production shown on a contained metal basis.
Copper production increased by 17% to 171,800 tonnes, with production increases at all operations.
Production from Los Bronces increased by 23% to 95,800 tonnes, driven by continued strong mine and plant performance, supported by significantly lower than usual winter snowfall and planned higher grades (0.76% vs. 0.69%).
At Collahuasi, attributable production increased by 5% to 61,500 tonnes reflecting planned higher grades (1.33% vs. 1.24%). Production increased by 12% compared with Q2 2018 owing to the completion of planned three-month major maintenance on 8 July.
El Soldado production increased by 33% to 14,500 tonnes due to a combination of strong mine and plant performance and planned higher grades.
Full Year Guidance
Full year production guidance is unchanged at 630,000 - 660,000 tonnes.
Copper(1)
Q3
2018
Q2
2018
Q1
2018
Q4
2017
Q3
2017
Q3 2018 vs.
Q2 2018
Q3 2018
vs.
Q3 2017
YTD
2018
YTD
2017
YTD 2018
vs.
YTD 2017
Collahuasi 100% basis
(Anglo American share 44%)
Ore mined
13,791,400
11,454,400
11,859,300
17,478,300
18,467,800
20%
(25)%
37,105,100
47,255,200
(21)%
Ore processed - Sulphide
12,332,800
10,605,100
12,894,200
13,658,400
13,084,900
16%
(6)%
35,832,100
36,228,400
(1)%
Ore grade processed - Sulphide (% TCu)(2)
1.33
1.34
1.24
1.28
1.24
(1)%
7%
1.30
1.24
5%
Production - Copper cathode
-
-
-
-
-
-
-
-
100
-
Production - Copper in concentrate
139,700
124,500
137,600
144,400
132,600
12%
5%
401,800
379,500
6%
Total copper production for Collahuasi
139,700
124,500
137,600
144,400
132,600
12%
5%
401,800
379,600
6%
Anglo American's share of copper production for Collahuasi(3)
61,500
54,700
60,600
63,500
58,300
12%
5%
176,800
167,000
6%
Los Bronces(4)
95,800
89,700
85,000
75,400
78,100
7%
23%
270,600
232,900
16%
Ore mined
13,019,000
17,837,300
15,675,300
11,553,900
12,707,100
(27)%
2%
46,531,600
37,785,700
23%
Ore processed - Sulphide
13,089,300
12,346,700
12,477,100
10,610,600
11,675,700
6%
12%
37,913,100
35,429,400
7%
Ore grade processed - Sulphide (% TCu)(2)
0.76
0.76
0.71
0.76
0.69
0%
10%
0.74
0.69
7%
Production - Copper cathode
10,300
10,000
8,500
9,800
9,800
3%
5%
28,800
28,500
1%
Production - Copper in concentrate
85,500
79,700
76,600
65,600
68,300
7%
25%
241,800
204,400
18%
El Soldado(4)
14,500
13,600
9,300
9,700
10,900
7%
33%
37,400
30,800
21%
Ore mined
3,361,000
2,905,800
2,112,500
1,698,500
1,462,200
16%
130%
8,379,300
3,639,900
130%
Ore processed - Sulphide
2,036,000
1,825,000
1,785,600
1,846,600
1,851,700
12%
10%
5,646,600
5,548,500
2%
Ore grade processed - Sulphide (% TCu)(2)
0.87
0.90
0.67
0.65
0.73
(3)%
19%
0.82
0.70
17%
Production - Copper in concentrate
14,500
13,600
9,300
9,700
10,900
7%
33%
37,400
30,800
21%
Chagres Smelter(4)
Ore smelted
37,700
39,300
34,700
35,600
35,400
(4)%
6%
111,700
98,200
14%
Production
36,900
38,400
33,800
34,700
34,400
(4)%
7%
109,100
95,300
14%
Total copper production(5)
171,800
158,000
154,900
148,600
147,300
9%
17%
484,800
430,700
13%
Total payable copper production
165,700
152,600
149,100
143,100
141,900
9%
17%
467,400
415,200
13%
Total sales volumes
159,900
174,400
131,600
156,400
163,900
(8)%
(2)%
465,900
423,300
10%
Total payable sales volumes
154,200
168,400
126,700
150,600
158,000
(8)%
(2)%
449,300
408,100
10%
Third party sales(6)
51,800
40,700
30,800
40,500
33,700
27%
54%
123,300
70,900
74%
(1) Excludes copper production from the Platinum Group Metals business unit. Units shown are tonnes unless stated.
(2) TCu = total copper.
(3) Anglo American's share of Collahuasi production is 44%.
(4) Anglo American ownership interest of Los Bronces, El Soldado and the Chagres Smelter is 50.1%. Production is stated at 100% as Anglo American consolidates these operations.
(5) Total copper production includes Anglo American's 44% interest in Collahuasi.
(6) Relates to sales of copper not produced by Anglo American operations.
PLATINUM GROUP METALS
Platinum
Q3
2018
Q3
2017
Q3 2018
vs.
Q3 2017
Q2
2018
Q3 2018 vs.
Q2 2018
YTD 2018
YTD
2017
YTD 2018
vs.
YTD 2017
Produced M&C(1) ounces
000 oz
649.0
621.5
4%
619.6
5%
1,882.4
1,810.4
4%
Own mined(2)
000 oz
332.9
357.8
(7)%
340.2
(2)%
1,016.1
1,026.4
(1)%
Purchase of concentrate(3)
000 oz
316.1
263.7
20%
279.4
13%
866.3
784.0
10%
Palladium
Produced M&C(1) ounces
000 oz
410.8
407.5
1%
406.0
1%
1,224.2
1,182.6
4%
Own mined(2)
000 oz
250.2
262.7
(5)%
260.8
(4)%
778.7
757.3
3%
Purchase of concentrate(3)
000 oz
160.6
144.8
11%
145.2
11%
445.5
425.3
5%
Refined production
Platinum
000 oz
556.2
684.1
(19)%
572.7
(3)%
1,631.5
1,789.7
(9)%
Palladium
000 oz
321.5
450.6
(29)%
366.7
(12)%
1,008.0
1,177.0
(14)%
Rhodium
000 oz
65.2
79.4
(18)%
73.8
(12)%
201.5
235.8
(15)%
Gold
000 oz
27.4
31.1
(12)%
27.3
0%
77.6
85.0
(9)%
Nickel
t
5,600
7,000
(20)%
5,700
(2)%
16,400
18,200
(10)%
Copper
t
2,900
4,300
(33)%
4,000
(28)%
10,100
11,000
(8)%
(1) Mined and purchase of concentrate.
(2) Includes managed operations and 50% of joint venture production.
(3) Purchase of concentrate includes 50% of joint venture production, and the purchase of concentrate from associates (Bokoni and BRPM) and third parties.
Platinum production increased by 4% to 649,000 ounces and palladium production increased by 1% to 410,800 ounces due to improved operational performances across the majority of the portfolio, despite the placing of unprofitable production from Bokoni on care and maintenance in Q3 2017.
Own mined production
Own mined platinum production decreased by 7% to 332,900 ounces and palladium production decreased by 5% to 250,200 ounces due to the sale of Union mine to Siyanda Resources on 1 February 2018, after which its production was purchased as concentrate. Excluding Union, own mined platinum production increased by 5% and palladium production increased by 2%.
Mogalakwena platinum production decreased by 2% to 113,900 ounces and palladium production decreased by 2% to 127,100 ounces. This was the result of lower concentrator throughput and lower recovery due to concentrator maintenance, partially offset by higher grades. Grades of material processed are expected to be lower in Q4 2018, with an impact on production volume.
Amandelbult platinum production increased by 5% to 126,000 ounces and palladium production increased by 4% to 57,300 ounces. This was driven by continued operational improvement, supported by increased development at Dishaba, as mining activities transitioned to this section.
Unki platinum production increased by 13% to 22,400 ounces and palladium production increased by 15% to 19,700 ounces as a result of an increase in tonnes milled, improvements in recovery and higher grade.
Joint venture platinum production (Mototolo, Modikwa and Kroondal) increased by 14% to 141,200 ounces (of which 70,600 ounces is own mined production and 70,600 ounces is purchased concentrate). Palladium production increased by 10% to 92,200 ounces (of which 46,100 ounces is own mined production and 46,100 ounces is purchased concentrate). This was largely due to lower production in Q3 2017 when the Mototolo concentrator was temporarily stopped to carry out remedial work at a tailings facility.
Purchase of concentrate
Purchase of concentrate from joint ventures increased by 14% for platinum and 10% for palladium for the reasons outlined above.
Purchase of concentrate from associates decreased by 9% for platinum and 25% for palladium due to the removal of unprofitable ounces from Bokoni which was placed on care and maintenance in Q3 2017.
Purchase of concentrate from third parties increased by 40% for platinum and 31% for palladium due to concentrate purchased from Union mine following its sale.
Refined production and sales volumes
Refined platinum production decreased by 19% to 556,200 ounces and refined palladium production decreased by 29% to 321,500 ounces due to a rebuild of the Mortimer smelter in Q2 2018 and its progressive ramp up in Q3 2018 as well as the Polokwane smelter furnace repair that required a full shutdown for 35 days.
Platinum sales volumes (excluding refined metal purchased from third parties) decreased by 20% to 530,100 ounces and palladium sales volumes decreased by 30% to 324,300 ounces due to lower refined production.
Full year guidance
Due to strong operational performance across the portfolio, 2018 platinum production guidance has been revised upwards to 2.45-2.50 million ounces (previously 2.40-2.45 million ounces) and palladium production guidance has been tightened to 1.55-1.60 million ounces (previously 1.50-1.60 million ounces).
As a result of scheduled smelter rebuilds and maintenance at both Mortimer smelter and Polokwane smelter, there has been a build-up of work-in-progress inventory at the end of the third quarter, with platinum and palladium at ~270,000 ounces and ~160,000 ounces respectively, over and above targeted levels. The work-in-progress inventory is unlikely to be refined in full by year-end, and therefore full year refined production is expected to be lower than production of concentrate. Full year refined platinum production guidance is maintained at 2.40-2.45 million ounces and palladium refined production at the lower end of guidance of 1.50-1.60 million ounces. The remaining build-up in work-in-progress inventory will be processed and is expected to return to targeted levels in H1 2019. Platinum and palladium sales volumes are expected to remain in line with refined production.
Platinum
Q3
2018
Q2
2018
Q1
2018
Q4
2017
Q3
2017
Q3 2018
vs.
Q2 2018
Q3 2018
vs.
Q3 2017
YTD
2018
YTD
2017
YTD 2018
vs.
YTD 2017
Produced platinum
(000 troy oz)
649.0
619.6
613.8
587.0
621.5
5%
4%
1,882.4
1,810.4
4%
Own mined
332.9
340.2
343.0
349.8
357.8
(2)%
(7)%
1,016.1
1,026.4
(1)%
Mogalakwena
113.9
133.4
139.4
121.7
116.3
(15)%
(2)%
386.7
342.1
13%
Amandelbult
126.0
116.3
103.9
114.8
119.5
8%
5%
346.2
323.2
7%
Unki
22.4
20.9
20.6
16.4
19.9
7%
13%
63.9
58.2
10%
Joint ventures(1)
70.6
69.6
67.5
59.8
62.2
1%
14%
207.7
185.5
12%
Union
-
-
11.6
37.1
39.9
-
(100)%
11.6
117.4
(90)%
Purchase of concentrate
316.1
279.4
270.8
237.2
263.7
13%
20%
866.3
784.0
10%
Joint ventures(1)
70.6
69.6
67.5
59.8
62.2
1%
14%
207.7
185.5
12%
Associates(2)
66.7
54.3
52.3
54.8
73.5
23%
(9)%
173.3
210.7
(18)%
Third parties
178.8
155.5
151.0
122.6
128.0
15%
40%
485.3
387.8
25%
Palladium
Produced palladium
(000 troy oz)
410.8
406.0
407.4
374.9
407.5
1%
1%
1,224.2
1,182.6
4%
Own mined
250.2
260.8
267.7
251.5
262.7
(4)%
(5)%
778.7
757.3
3%
Mogalakwena
127.1
145.1
150.5
127.8
129.9
(12)%
(2)%
422.7
381.1
11%
Amandelbult
57.3
52.2
50.7
53.7
55.1
10%
4%
160.2
148.7
8%
Unki
19.7
18.4
17.8
14.2
17.2
7%
15%
55.9
50.2
11%
Joint ventures(1)
46.1
45.1
43.5
38.7
42.1
2%
10%
134.7
122.9
10%
Union
-
-
5.2
17.1
18.4
-
(100)%
5.2
54.4
(90)%
Purchase of concentrate
160.6
145.2
139.7
123.4
144.8
11%
11%
445.5
425.3
5%
Joint ventures(1)
46.1
45.1
43.5
38.7
42.1
2%
10%
134.7
122.9
10%
Associates(2)
27.2
22.0
21.7
22.1
36.3
24%
(25)%
70.9
105.7
(33)%
Third parties
87.3
78.1
74.5
62.6
66.4
12%
31%
239.9
196.7
22%
Refined production
Platinum (000 troy oz)
556.2
572.7
502.6
722.2
684.1
(3)%
(19)%
1,631.5
1,789.7
(9)%
Palladium (000 troy oz)
321.5
366.7
319.8
491.4
450.6
(12)%
(29)%
1,008.0
1,177.0
(14)%
Rhodium (000 troy oz)
65.2
73.8
62.5
87.4
79.4
(12)%
(18)%
201.5
235.8
(15)%
Gold (000 troy oz)
27.4
27.3
22.9
30.3
31.1
0%
(12)%
77.6
85.0
(9)%
Nickel (tonnes)
5,600
5,700
5,100
7,800
7,000
(2)%
(20)%
16,400
18,200
(10)%
Copper (tonnes)
2,900
4,000
3,200
4,700
4,300
(28)%
(33)%
10,100
11,000
(8)%
4E Head grade
(g/tonne milled)(3)
3.58
3.60
3.45
3.53
3.44
(1)%
4%
3.51
3.44
2%
Platinum sales volumes
(000 troy oz)(4)
530.1
636.4
480.8
721.7
663.6
(17)%
(20)%
1,647.3
1,782.9
(8)%
Palladium sales volumes
(000 troy oz)(4)
324.3
405.3
328.2
473.5
462.0
(20)%
(30)%
1,057.8
1,098.2
(4)%
Platinum third party sales volumes (000 troy oz)(5)
26.9
45.8
19.8
-
-
(41)%
-
92.5
-
-
Palladium third party sales volumes (000 troy oz)(5)
55.0
45.0
8.0
-
-
22%
-
108.0
-
-
(1) The joint venture operations are Mototolo, Modikwa and Kroondal. Platinum Group Metals owns 50% of these operations, which is presented under 'Own mined' production, and purchases the remaining 50% of production, which is presented under 'Purchase of concentrate'.
(2) Associates are Platinum Group Metals' 33% interest in BRPM and, also in 2017, its 49% interest in Bokoni, which was placed on care and maintenance in Q3 2017.
(3) 4E: the grade measured as the combined content of: platinum, palladium, rhodium and gold.
(4) Sales from own mined and purchased concentrate, excludes refined metal purchased from third parties.
(5) Relates to sales of metal not produced by Anglo American operations.
IRON ORE
Iron Ore
Q3
2018
Q3
2017
Q3 2018
vs.
Q3 2017
Q2
2018
Q3 2018 vs.
Q2 2018
YTD
2018
YTD
2017
YTD 2018
vs.
YTD 2017
Kumba
000 t
10,508
11,486
(9)%
11,572
(9)%
32,936
33,340
(1)%
Minas-Rio(1)
000 t
-
4,171
-
106
-
3,155
12,837
(75)%
(1) Wet basis.
Kumba - Iron ore production volumes decreased by 9% to 10.5 million tonnes, as planned, following rail constraints in H1 2018, and a small decrease in plant yields as Kumba produced higher quality products to maximise the value of tonnes railed to port.
Sishen's production decreased by 10% to 7 million tonnes, while waste movement increased by 7% to 45 million tonnes (Q3 2017: 42 million tonnes).
Kolomela's production decreased by 6% to 3.5 million tonnes of ore, while waste movement remained flat at 16 million tonnes.
Export sales decreased by 10% to 9.7 million tonnes due to the scheduled refurbishment of a ship loader at the Saldanha Port that reduced loading capacity during the quarter. Total finished product stocks increased from 6.2 million tonnes at 30 June 2018 to 6.6 million tonnes at 30 September 2018, representing ~$175 million of working capital.
Minas-Rio - As previously indicated, there was no production in Q3 2018 (Q3 2017: 4.2 million tonnes) as a result of the suspension of operations since March 2018 following two leaks in the iron ore slurry pipeline.
The detailed pipeline inspection work is on track, as well as the precautionary replacement of a 4 kilometre section of the pipeline where the leaks occurred. Both the inspection and replacement work are expected to be completed in Q4 2018, followed by the restart of the operation, subject to required clearance from the authorities. There is no change to the expected earnings impact of the pipeline incident from the guidance previously provided, with a 2018 loss of $300-$400 million in EBITDA.
Full Year Guidance
Full year production guidance for Kumba is unchanged at 43-44 million tonnes. Waste guidance for 2018 is unchanged at 170-180 million tonnes for Sishen and 55-57 million tonnes for Kolomela.
Full year production guidance for Minas-Rio is unchanged at 3 million tonnes, reflecting production delivered to date in 2018.
Iron Ore (tonnes)
Q3
2018
Q2
2018
Q1
2018
Q4
2017
Q3
2017
Q3 2018 vs.
Q2 2018
Q3 2018
vs.
Q3 2017
YTD
2018
YTD
2017
YTD 2018
vs.
YTD 2017
Kumba production
10,508,400
11,572,000
10,855,100
11,642,600
11,485,700
(9)%
(9)%
32,935,500
33,339,900
(1)%
Lump
7,159,800
7,889,600
7,243,500
7,719,100
7,609,200
(9)%
(6)%
22,292,900
22,092,200
1%
Fines
3,348,600
3,682,400
3,611,600
3,923,500
3,876,500
(9)%
(14)%
10,642,600
11,247,700
(5)%
Kumba production by mine
Sishen
7,030,600
7,930,300
7,324,600
7,782,300
7,786,100
(11)%
(10)%
22,285,500
23,336,900
(5)%
Kolomela
3,477,800
3,641,700
3,530,500
3,860,300
3,699,600
(5)%
(6)%
10,650,000
10,003,000
6%
Kumba sales volumes
Export iron ore
9,736,700
9,560,100
9,945,700
11,354,800
10,783,200
2%
(10)%
29,242,500
30,259,800
(3)%
Domestic iron ore
755,600
781,900
885,400
875,700
644,100
(3)%
17%
2,422,900
2,401,400
1%
Minas-Rio production
Pellet feed (wet basis)
-
105,800
3,049,400
3,949,900
4,171,500
-
-
3,155,200
12,837,300
(75)%
Minas-Rio sales volumes
Export - pellet feed (wet basis)
-
320,800
2,896,100
4,140,700
3,739,800
-
-
3,216,800
12,367,300
(74)%
COAL
Coal(1)
Q3
2018
Q3
2017
Q3 2018
vs.
Q3 2017
Q2
2018
Q3 2018 vs.
Q2 2018
YTD 2018
YTD
2017
YTD 2018
vs.
YTD 2017
Metallurgical Coal (Australia)
000 t
5,382
5,532
(3)%
5,262
2%
16,183
14,737
10%
Export Thermal Coal (Australia)
000 t
455
421
8%
290
57%
954
1,205
(21)%
Export Thermal Coal
(South Africa)(2)
000 t
5,054
4,352
16%
4,440
14%
13,822
13,945
(1)%
Export Thermal Coal (Colombia)
000 t
2,658
2,497
6%
2,762
(4)%
7,863
7,728
2%
Domestic Thermal Coal
(South Africa)
000 t
2,650
8,367
(68)%
2,780
(5)%
10,400
24,110
(57)%
(1) Anglo American's attributable share of production.
(2) Includes export primary production, secondary production sold into export markets and production sold domestically at export parity pricing.
Metallurgical Coal - Export metallurgical coal production decreased by 3% to 5.4 million tonnes, with the Grosvenor ramp up being offset by a longwall move at Moranbah, anticipated challenging geological conditions at Grasstree and lower production at Dawson.
Thermal Coal South Africa - Export thermal coal production increased by 16% to 5.1 million tonnes, following operational improvements in the quarter and the impact of a 100-hour safety stoppage in Q3 2017, partly offset by conveyor issues at Zibulo.
Domestic thermal coal production decreased by 68% to 2.7 million tonnes due to the completion of the sale of the Eskom-tied operations (New Vaal, New Denmark and Kriel) to Seriti on 1 March 2018.
Thermal Coal Colombia - Attributable export thermal coal production from Cerrejón increased by 6% to 2.7 million tonnes.
Full Year Guidance
Full year production guidance for Metallurgical Coal is unchanged at 20-22 million tonnes.
Full year production guidance for Export Thermal Coal is unchanged from Q2 at 28-30 million tonnes.
Coal, by product (tonnes)(1)
Q3
2018
Q2
2018
Q1
2018
Q4
2017
Q3
2017
Q3 2018 vs.
Q2 2018
Q3 2018
vs.
Q3 2017
YTD
2018
YTD
2017
YTD 2018
vs.
YTD 2017
Metallurgical Coal (Australia)
5,382,300
5,261,900
5,539,100
4,923,900
5,531,500
2%
(3)%
16,183,300
14,737,400
10%
Hard Coking Coal
4,545,800
4,534,800
4,853,200
4,300,300
4,696,200
-
(3)%
13,933,800
12,680,500
10%
PCI / SSCC
836,500
727,100
685,900
623,600
835,300
15%
-
2,249,500
2,056,900
9%
Thermal Coal
10,816,800
10,271,300
11,950,300
15,172,700
15,637,100
5%
(31)%
33,038,400
46,987,500
(30)%
Export (Australia)
455,100
289,900
208,700
408,600
421,400
57%
8%
953,700
1,205,100
(21)%
Export (South Africa)(2)
5,054,400
4,439,600
4,327,500
4,647,800
4,352,000
14%
16%
13,821,500
13,944,700
(1)%
Export (Colombia)
2,657,600
2,761,500
2,444,300
2,913,600
2,496,700
(4)%
6%
7,863,400
7,728,000
2%
Domestic (South Africa)
2,649,700
2,780,300
4,969,800
7,202,700
8,367,000
(5)%
(68)%
10,399,800
24,109,700
(57)%
Total coal production
16,199,100
15,533,200
17,489,400
20,096,600
21,168,600
4%
(23)%
49,221,700
61,725,000
(20)%
Sales volumes
Metallurgical Coal (Australia)
5,442,800
5,094,500
5,632,900
5,323,600
5,341,700
7%
2%
16,170,200
14,446,900
12%
Hard Coking Coal
4,834,100
4,402,800
4,885,500
4,653,000
4,707,600
10%
3%
14,122,500
12,834,400
10%
PCI / SSCC
608,700
691,700
747,400
670,600
634,100
(12)%
(4)%
2,047,700
1,612,500
27%
Thermal Coal
11,782,900
12,904,300
14,227,800
17,079,500
18,892,600
(9)%
(38)%
38,914,800
53,556,200
(27)%
Export (Australia)
331,600
357,800
293,800
466,900
468,500
(7)%
(29)%
983,100
1,364,500
(28)%
Export (South Africa)(2)
3,679,600
4,092,700
4,615,700
4,843,500
4,921,200
(10)%
(25)%
12,387,900
13,765,300
(10)%
Export (Colombia)
2,589,100
2,762,900
2,480,200
2,619,400
2,517,500
(6)%
3%
7,832,200
7,934,300
(1)%
Domestic (South Africa)
3,305,800
3,146,500
4,711,000
7,370,300
8,549,300
5%
(61)%
11,163,300
24,652,800
(55)%
Third party sales
1,876,800
2,544,400
2,127,100
1,779,400
2,436,100
(26)%
(23)%
6,548,300
5,839,300
12%
(1) Anglo American's attributable share of production and sales.
(2) Includes export primary production, secondary production sold into export markets and production sold domestically at export parity pricing.
Coal, by operation (tonnes)(1)
Q3
2018
Q2
2018
Q1
2018
Q4
2017
Q3
2017
Q3 2018
vs.
Q2 2018
Q3 2018
vs.
Q3 2017
YTD
2018
YTD
2017
YTD 2018
vs.
YTD 2017
Metallurgical Coal (Australia)
5,382,300
5,261,900
5,539,100
4,923,900
5,531,500
2%
(3)%
16,183,300
14,737,400
10%
Moranbah North
1,275,800
1,064,300
1,936,700
1,979,800
1,316,800
20%
(3)%
4,276,800
3,421,500
25%
Grosvenor
1,239,800
1,342,000
825,600
161,300
1,012,500
(8)%
22%
3,407,400
1,905,900
79%
Capcoal (incl. Grasstree)
1,564,700
1,324,200
1,396,000
1,604,900
1,712,100
18%
(9)%
4,284,900
4,881,500
(12)%
Dawson
478,700
714,100
534,500
319,700
670,300
(33)%
(29)%
1,727,300
2,163,000
(20)%
Jellinbah
823,300
817,300
846,300
858,200
819,800
1%
-
2,486,900
2,365,500
5%
Thermal Coal (Australia)
455,100
289,900
208,700
408,600
421,400
57%
8%
953,700
1,205,100
(21)%
Capcoal (incl. Grasstree)
71,600
66,000
65,500
95,400
62,000
8%
15%
203,100
186,900
9%
Dawson
357,700
193,400
114,500
310,800
342,500
85%
4%
665,600
988,700
(33)%
Jellinbah
25,800
30,500
28,700
2,400
16,900
(15)%
53%
85,000
29,500
188%
Total Australia production
5,837,400
5,551,800
5,747,800
5,332,500
5,952,900
5%
(2)%
17,137,000
15,942,500
7%
Thermal (South Africa)(2)
Goedehoop
1,527,000
1,185,900
1,138,000
1,114,300
1,085,400
29%
41%
3,850,800
3,538,400
9%
Greenside
1,264,300
941,500
1,043,600
1,041,200
906,700
34%
39%
3,249,400
2,789,200
16%
Zibulo
1,468,700
1,553,500
1,673,100
1,587,900
1,534,600
(5)%
(4)%
4,695,300
4,646,900
1%
Khwezela
1,468,800
1,297,200
1,244,000
1,371,300
1,265,300
13%
16%
4,010,000
4,336,300
(8)%
Mafube
402,700
172,100
105,600
350,900
361,200
134%
11%
680,500
1,210,300
(44)%
Other(3)
604,100
1,076,700
-
-
-
(44)%
n/a
1,680,700
-
n/a
New Vaal(4)
-
-
1,560,500
3,218,500
4,354,300
n/a
n/a
1,560,500
11,890,500
(87)%
New Denmark(4)
-
-
560,100
963,300
673,700
n/a
n/a
560,200
2,397,600
(77)%
Kriel(4)
-
-
704,900
1,237,400
1,392,700
n/a
n/a
704,900
4,151,400
(83)%
Isibonelo
968,500
993,000
1,267,500
965,700
1,145,100
(2)%
(15)%
3,229,000
3,093,800
4%
Total South Africa production
7,704,100
7,219,900
9,297,300
11,850,500
12,719,000
7%
(39)%
24,221,300
38,054,400
(36)%
Colombia (Cerrejón)
2,657,600
2,761,500
2,444,300
2,913,600
2,496,700
(4)%
6%
7,863,400
7,728,000
2%
Total Coal production
16,199,100
15,533,200
17,489,400
20,096,600
21,168,600
4%
(23)%
49,221,700
61,725,000
(20)%
(1) Anglo American's attributable share of production.
(2) Export and domestic production; New Vaal, New Denmark, Kriel and Isibonelo produce exclusively domestic volumes.
(3) Other production comes from the recovery of saleable product from mineral residue deposits.
(4) The sale of the Eskom-tied operations was completed on 1 March 2018.
NICKEL
Nickel
Q3
2018
Q3
2017
Q3 2018
vs.
Q3 2017
Q2
2018
Q3 2018 vs.
Q2 2018
YTD 2018
YTD
2017
YTD 2018
vs.
YTD 2017
Nickel
t
11,500
11,200
3%
10,800
6%
30,900
32,400
(5%)
Nickel output increased by 3% to 11,500 tonnes driven by enhanced stability arising from operational improvements implemented at Barro Alto during 2018.
Full year production guidance is unchanged at 42,000-44,000 tonnes.
Nickel(1)
Q3
2018
Q2
2018
Q1
2018
Q4
2017
Q3
2017
Q3 2018 vs.
Q2 2018
Q3 2018
vs.
Q3 2017
YTD
2018
YTD
2017
YTD 2018
vs.
YTD 2017
Barro Alto
Ore mined
1,640,400
1,208,800
1,001,500
978,600
1,895,000
36%
(13%)
3,850,700
5,294,200
(27%)
Ore processed
620,900
588,200
447,600
591,500
578,200
6%
7%
1,656,800
1,717,800
(4%)
Ore grade processed - %Ni
1.73
1.67
1.68
1.71
1.72
4%
0%
1.69
1.71
(1%)
Production
9,400
8,600
6,500
9,100
8,900
9%
6%
24,500
25,800
(5%)
Codemin
Ore mined
-
-
-
-
-
-
-
-
7,500
-
Ore processed
139,100
150,600
141,100
147,200
152,200
(8%)
(9%)
430,900
439,800
(2%)
Ore grade processed - %Ni
1.69
1.62
1.66
1.70
1.70
4%
(1%)
1.65
1.68
(2%)
Production
2,100
2,200
2,100
2,300
2,300
(5%)
(9%)
6,400
6,600
(3%)
Total Nickel segment nickel production
11,500
10,800
8,600
11,400
11,200
6%
3%
30,900
32,400
(5%)
Sales volumes
10,400
10,800
9,200
10,900
11,300
(4%)
(8%)
30,500
32,100
(5%)
(1) Excludes nickel production from the Platinum Group Metals business unit.
MANGANESE
Manganese
Q3
2018
Q3
2017
Q3 2018
vs.
Q3 2017
Q2
2018
Q3 2018 vs.
Q2 2018
YTD 2018
YTD
2017
YTD 2018
vs.
YTD 2017
Manganese ore (1)
000 t
888
840
6%
866
2%
2,635
2,506
5%
Manganese alloys(1)(2)
000 t
35
37
(7)%
43
(19)%
119
108
10%
(1) Saleable production.
(2) Production includes medium carbon ferro-manganese.
Manganese ore - Manganese ore production increased by 6% to 887,600 tonnes, a record production quarter.
Manganese alloy - Manganese alloy production decreased by 7% to 34,800 tonnes due to a planned maintenance shutdown of the furnace during the quarter.
Manganese (tonnes)
Q3
2018
Q2
2018
Q1
2018
Q4
2017
Q3
2017
Q3 2018 vs.
Q2 2018
Q3 2018
vs.
Q3 2017
YTD
2018
YTD
2017
YTD 2018
vs.
YTD 2017
Samancor
Manganese ore(1)
887,600
866,200
880,800
979,600
839,500
2%
6%
2,634,600
2,505,900
5%
Manganese alloys(1)(2)
34,800
42,800
41,200
41,100
37,300
(19)%
(7)%
118,800
108,100
10%
Samancor sales volumes
Manganese ore
840,400
910,100
824,200
874,900
846,900
(8)%
(1)%
2,574,700
2,570,500
0%
Manganese alloys
30,400
48,400
38,300
37,300
33,500
(37)%
(9)%
117,100
105,100
11%
(1) Saleable production.
(2) Production includes medium carbon ferro-manganese.
EXPLORATION AND EVALUATION
Exploration and Evaluation expenditure for the third quarter increased by 25% to $74 million compared to the same period of 2017. Exploration expenditure increased by 24% to $36 million driven by new greenfield opportunities in Brazil (copper-gold), Ecuador (copper-gold) and Canada (diamonds) as well as near-mine drilling. Evaluation expenditure increased by 27% to $38 million driven by increased work at Los Bronces.
CORPORATE ACTIVITY AND OTHER ITEMS
There were a number of non-operating cashflows that occurred during the quarter or are anticipated prior to year-end. These include:
· Proceeds of $851 million from the syndication of Quellaveco (that will be used to fund the project's capital expenditure during 2018);
· De Beers' acquisition of Peregrine Diamonds for $82 million; and
· the expected completion in Q4 2018 of the acquisition of Glencore's share of the Mototolo platinum joint venture, with an up-front cash payment of approximately $59 million.
In addition, the Group's purchase of shares for employee share schemes continues.
Working capital has built up in the quarter and is expected to unwind partially over the remainder of 2018 and be cleared during the first half of 2019. The inventory build-up is driven by:
· strong mining performance and lower refined volumes due to scheduled smelter rebuilds and maintenance at PGMs;
· the re-phasing of sales of low value diamonds at De Beers; and
· rail infrastructure constraints at Kumba Iron Ore.
NOTES
· This Production Report for the third quarter ended 30 September 2018 is unaudited.
· Production figures are sometimes more precise than the rounded numbers shown in this report.
· Copper equivalent production shows changes in underlying production volume. It is calculated by expressing each commodity's volume as revenue, subsequently converting the revenue into copper equivalent units by dividing by the copper price (per tonne). Long-term forecast prices (and foreign exchange rates where appropriate) are used, in order that period-on-period comparisons exclude any impact for movements in price.
· Please refer to page 14 for information on forward-looking statements.
For further information, please contact:
Media
Investors
UK
James Wyatt-Tilby
james.wyatt-tilby@angloamerican.com
Tel: +44 (0)20 7968 8759
Marcelo Esquivel
marcelo.esquivel@angloamerican.com
Tel: +44 (0)20 7968 8891
South Africa
Pranill Ramchander
pranill.ramchander@angloamerican.com
Tel: +27 (0)11 638 2592
Ann Farndell
ann.farndell@angloamerican.com
Tel: +27 (0)11 638 2786
UK
Paul Galloway
paul.galloway@angloamerican.com
Tel: +44 (0)20 7968 8718
Robert Greenberg
robert.greenberg@angloamerican.com
Tel: +44 (0)20 7968 2124
Emma Waterworth
emma.waterworth@angloamerican.com
Tel: +44 (0)20 7968 8574
Forward-looking statements:
This announcement includes forward-looking statements. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding Anglo American's financial position, business, acquisition and divestment strategy, dividend policy, plans and objectives of management for future operations (including development plans and objectives relating to Anglo American's products, production forecasts and Ore Reserves and Mineral Resources), are forward-looking statements. By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Anglo American, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
Such forward-looking statements are based on numerous assumptions regarding Anglo American's present and future business strategies and the environment in which Anglo American will operate in the future. Important factors that could cause Anglo American's actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, levels of actual production during any period, levels of global demand and commodity market prices, mineral resource exploration and development capabilities, recovery rates and other operational capabilities, the availability of mining and processing equipment, the ability to produce and transport products profitably, the availability of transportation infrastructure, the impact of foreign currency exchange rates on market prices and operating costs, the availability of sufficient credit, the effects of inflation, political uncertainty and economic conditions in relevant areas of the world, the actions of competitors, activities by governmental authorities such as permitting and changes in taxation or safety, health, environmental or other types of regulation in the countries where Anglo American operates, conflicts over land and resource ownership rights and such other risk factors identified in Anglo American's most recent Annual Report. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward-looking statements.
These forward-looking statements speak only as of the date of this announcement. Anglo American expressly disclaims any obligation or undertaking (except as required by applicable law, the City Code on Takeovers and Mergers (the "Takeover Code"), the UK Listing Rules, the Disclosure and Transparency Rules of the Financial Conduct Authority, the Listings Requirements of the securities exchange of the JSE Limited in South Africa, the SWX Swiss Exchange, the Botswana Stock Exchange and the Namibian Stock Exchange and any other applicable regulations) to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in Anglo American's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
Notes to editors:
Anglo American is a global diversified mining business and our products are the essential ingredients in almost every aspect of modern life. Our portfolio of world-class competitive mining operations and undeveloped resources provides the metals and minerals to meet the growing consumer-driven demands of the world's developed and maturing economies. With our people at the heart of our business, we use innovative practices and the latest technologies to discover new resources and mine, process, move and market our products to our customers around the world.
As a responsible miner - of diamonds (through De Beers), copper, platinum and other precious metals, iron ore, coal and nickel - we are the custodians of what are precious natural resources. We work together with our key partners and stakeholders to unlock the sustainable value that those resources represent for our shareholders, the communities and countries in which we operate and for society at large. Anglo American is re-imagining mining to improve people's lives.
Legal Entity Identifier: 549300S9XF92D1X8ME43
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